[DigitalToday reporter Yoonseo Lee (이윤서)] Shiba Inu is showing technical rebound signals, drawing attention to the possibility of a short-term shift to bullishness.

On July 10 (local time), blockchain media outlet The Crypto Basic reported that Shiba Inu is showing simultaneous bullish divergence in the relative strength index (RSI) and the moving average convergence/divergence (MACD) on the daily chart, while attempting to break above the upper end of a downtrend line that has persisted for months.

The key is the diverging movement between price and momentum indicators. Shiba Inu's price continues to make lower lows, but the RSI and MACD showed a pattern of making higher lows. The market views this bullish divergence as an early sign that selling pressure is weakening.

The trend became clearer in June. Shiba Inu slid to $0.00000430 on June 6, pushing the RSI down to 20, then rebounded briefly before making a lower low of $0.00000405 on June 26. The RSI, however, did not break its prior low and marked a higher low of 21.44. That means momentum did not deteriorate even as the price stayed weak.

The MACD showed the same pattern. The MACD line formed a higher low and the histogram shifted from red bars to green bars. The bars also appeared at their longest length since March.

In terms of price levels, whether it breaks the downtrend line is the key variable. Shiba Inu has remained below this resistance line since hitting a May high of $0.00000670. Subsequent rebound attempts were also blocked near the resistance line. On July 10, it rose about 2 percent to $0.00000437. If it actually moves above this trendline and manages to settle there on a closing basis, the signal of a recovery in buying could strengthen further.

A short-term target price of $0.00000558, the June high, was suggested. That is about 28 percent above the current price. If further gains continue, it could open the way to the May high of $0.00000670, about 53 percent above the current level.

On-chain fund flows also sent a signal in the same direction. CryptoQuant's exchange net inflow and net outflow indicator showed Shiba Inu net outflows of -131,880,000,000 SHIB over the past 24 hours. Exchange net inflow and net outflow refers to the difference between the amount entering exchanges and the amount leaving them.

This trend is read as a sign that investors are moving Shiba Inu from exchanges to private wallets. With the amount waiting to be sold on exchanges falling, market interest could increase on the supply and demand side in tandem with attempts at a technical breakout.

Ultimately, Shiba Inu's short-term direction depends on two conditions: whether the bullish divergence shown by the RSI and MACD is maintained, and whether the price actually breaks above the downtrend line and holds there. If exchange net outflows continue, expectations for a rebound could gain further support.